Commodities

Oil and natural gas daily review (October 30, 2012)

Contributed by Angel Broking

Crude Oil

Nymex crude oil prices declined around 0.9 percent yesterday taking cues from Tropical Strom Sandy hitting the US East Coast as number of refineries reduced its operations or was completely shut down as a precautionary measure which will reduce fuel supplies. A shut down indicates that demand for the crude oil will be affected in the shorter term.

Additionally, strength in the DX along with weak global market sentiments also exerted downside pressure on the prices. Crude oil prices touched an intra-day low of $84.79/bbl and closed at $85.50/bbl in yesterday's trading session.

On the domestic bourses, prices declined by 0.2 percent and closed at Rs.4,648/bbl after touching an intra-day low of Rs.4,622/bbl on Monday. Depreciation in the Indian Rupee prevented sharp downfall in the prices on the MCX.

API Inventories Forecast

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 1.5 million barrels for the week ending on 26th October 2012.

Gasoline stocks are expected to rise by 0.2 million barrels and distillate inventories are expected to drop by 1.2 million barrels for the same week.

Outlook

In the intra-day, we expect crude oil prices to trade on a positive note on the back of ample supplies of crude oil inventories and weak demand from the crude oil from the consuming nations. However, expectation of possible supply disruption of the crude oil as Hurricane Sandy hits the US east coast might cushion sharp fall in the crude oil prices. Depreciation in the Indian rupee is expected to cushion sharp fall in the MCX crude oil prices.